Seller’s Assistance Programs

For buyers who need a little help making a down payment, seller’s assistance programs may be the answer. These programs are for homebuyers who can afford the mortgage payment but do not have the money for a down payment. These programs are not just for first-time buyers. There are several organizations that provide down payment assistance. Some are listed below.

These organizations are unique in the way they function. A seller cannot, according to HUD guidelines, provide funds to the buyer for the down payment. These non-profit organizations provide money from their existing pool of funds to buyers. The seller makes a contribution or pays a fee in the settlement to the organization after the home is sold. The fee is usually tax deductible.

These gifts, which do not need to be repaid, are usually between 2% and 10% of the purchase price of the home. The funds can be used to pay for the down payment and closing costs. There is a fee for the service, which can be paid by the buyer, seller or lender depending on the specifications of each organization.

Buyers can combine these programs with FHA or other loans that allow for the use of gift funds. The gift can be applied toward single-family homes, manufactured homes, condominiums, townhouses, existing or new construction and rehabilitation.

After a borrower has been approved for a mortgage, the lender completes paperwork and sends it to the down payment assistance program. Any buyer who qualifies for a mortgage that allows gift funds is eligible for the assistance.

Many of these organizations offer mortgage relief in the event that the buyer loses his or her job or is disabled. Refer to each organization’s Web site for more information.

AmeriDream Program
http://www.ameridream.org/
(866) AMERIDREAM (263-7437)

AmeriDream is a charitable organization which offers assistance of up to 10% of sales price. The maximum sales price of the home is $359,650. The fee is paid by the seller and is the amount of the down payment gift (expressed as a percent) plus .75% or $500, whichever is the lesser.

Futures Home Assistance Program
http://www.onlinewithfutures.org/
(800) 672-4055

Futures offers down payment assistance of up to 6% of the purchase price. The limit for assistance is $25,000. The fee for online processing is $295 and $550 for manual processing. For assistance over 6%, the application must be processed manually.

Genesis Program
http://www.thegenesisprogram.org/whatisgenesis.cfm
(512) 231-0270

Genesis offers gifts of up to $22,500 based on need, not percentage of sales price. The fee for the service is 1% of the sales price or $750, whichever is less. The seller pays the fee.

HomeGrantsUSA
http://www.homegrantsusa.org
(866) 644-FUND (3863)

HomeGrantsUSA provides down payment assistance based on need, not percentage. The fee for the service is $350, and it can be paid by the seller or written into the loan.

Nehemiah Program
http://www.getdownpayment.com/
(877) 634-3642

Nehemiah originated the down payment assistance industry. The organization will lend up to 6% of the purchase price. The service fee is $499 for the resale of properties (online and manual) and $385 for online processing for new construction ($499 for manual). The fee can be paid by the buyer, seller or lender.

Neighborhood Gold
http://www.neighborhoodgold.com
(888) 627-3025

Neighborhood Gold is the largest down payment assistance program in the country. They offer 3-10% assistance with a maximum gift of $25,000. The service fee is paid by the seller and is equal to the grant amount. The fee for the service is $395, or $495 with mortgage payment protection (if homebuyer becomes unemployed during first year, Neighborhood Gold covers up to 6 months of mortgage payments).

Online Resources